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2013 (2) TMI 123 - ITAT HYDERABADUnexplained credits u/s 68 - CIT(A) in sustaining the addition of Rs. 17,25,000/- out of share capital - whether unexplained investment in the share capital can be assessed in the hands of the company u/s 68 - Held that:- As decided in G. Venkatareddy & Co. Vs. DCIT [2000 (10) TMI 182 - ITAT HYDERABAD-B] merely filing confirmatory letters to establish the identity of the creditors is not enough and it cannot be said that onus lying on the assessee had been discharged. Therefore, the AO was justified in not being satisfied by the explanation offered by the assessee in relation to the impugned cash credits because assessee had not proved capacity of such creditors to advance the money and he was justified in making additions of the cash credits under sec. 68 - all the amounts introduced by the assessee-company under the guise of share application money is nothing but income earned from the sources not disclosed to the department and the same were brought into the books by way of share application on different names - uphold the order of the CIT(A) in sustaining the addition of Rs. 17,25,000/- out of share capital as unexplained credits u/s 68 - in favour of revenue. Difference in job work charges/conversion charges credited to the P&L a/c and the amount furnished in the TDS certificate - additions confirmed by CIT(A) - Held that:- The assessee had produced the details of tax deducted at source with respect to job work charges and transport charges and the difference of Rs. 84,850/- represents the amounts paid by various parties on account of transport charges and has been credited to the account of transport charges. Therefore, the addition made by the Assessing Officer and confirmed by the CIT(A) on the ground that the assessee has not been able to produce satisfactory evidence in the matter, explaining the difference in the amount of job work charges as per TDS certificate and the amount offered as receipts, is deleted. Disallowance as contributions towards PF and ESI as per the provisions of section 43B - Held that:- The deduction of payment of employees’ contribution towards provident fund and ESI cannot be disallowed under section 43B, if paid before the due date of filing the return. Set aside the order of the CIT(A) and restore the issue to the file of the AO with a direction to allow this ground of appeal of the assessee, if the payments of PF & ESI are made before the due date of filing of the return in the light of the decision of Allied Motors Pvt. Ltd. (1997 (3) TMI 9 - SUPREME COURT). Reducing 90% of the job work charges and excise duty from profits of business applying clause (baa) of Explanation to section 80 HHC - Held that:- As decided in CIT Vs. Lakshmi Machine Works [2007 (4) TMI 202 - SUPREME COURT] the excise duty refund is not includible in the total turnover for the purpose of computing deduction u/s 80 HHC. As regards the job work charges the same is covered by the decision of Ravindranthan Nair (2007 (11) TMI 10 - SUPREME COURT OF INDIA) wherein held that processing charges, which are part of gross total income, form an item of independent income like rent, commission, brokerage, etc., and, therefore, 90 per cent of the processing charges has also to be reduced from the gross total income to arrive at the business profits and, therefore, it has also to be included in the total turnover in the formula for arriving at the business profits in terms of clause (baa) of the Explanation to section 80HHC(3). Addition of agricultural income as income from other sources - Held that:- The assessee itself agreed before the CIT(A) that the net agricultural income can be treated as ‘income from other sources’, therefore, we uphold the order of the CIT(A) in sustaining the addition of Rs. 1,61,050/- on this issue.
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